# IG5336.9201-ch6

CHAPTER 6
Labor Requirements

Contracting Office Davis-Bacon Act (DBA) Responsibilities

6.1. Application of DBA.

6.1.1. Should DBA be included in my contract? All contracts in excess of $2,000 issued for construction, alteration, or repair work (including painting and decorating) performed in the 50 United States and District of Columbia on public buildings or public works as defined in FAR 22.401 must include the DBA clauses FAR 52.222-5 through FAR 52.222-15 (as prescribed by FAR 22.407). These contracts must also include appropriate wage determination(s) for the proper type and location of the project. The DBA must also be included in “non-construction” contracts, such as contracts for services or supplies if the contract is a hybrid contract that also includes substantial and specific requirements for construction, alteration, or repair work and that work is capable of being segregated from the services or supply work (FAR 22.402(b) and DFARS 222.402-70). Several other clauses must be considered for inclusion in the contract as well, depending on the nature and value of the contract as follows:

6.1.2.1. Contract Work Hours and Safety Standards Act (FAR 52.222-4) as prescribed by FAR 22.305 must be included in DBA-covered contracts that exceed $100,000.

6.1.2.2 “Approval of Wage Rates” (FAR 52.222-16) as prescribed by FAR 22.407(b) must be included in cost-reimbursement contracts subject to the DBA. This provision requires approval of wage/benefit rates that exceed DBA prevailing minimum rates. If such rates are not approved by the head of the contracting activity or an expressly designated representative, “Any amount paid by the Contractor to any laborer or mechanic in excess of the agency approved wage rate shall be at the expense of the Contractor and shall not be reimbursed by the Government.”

6.1.2.3 “Labor Standards for Construction Work – Facilities Contracts” (FAR 52.222-17) as prescribed by FAR 22.407(c) & (d) must be included in contracts that are primarily for services or supplies, but may also require DBA-covered construction. This clause is required when a “facilities contract”, as defined in FAR 45.301, (generally a services or supply type contract) contains specific, substantial and segregable construction requirements as more fully described in FAR 22.402(b). This may be required, for example, in service contracts such as a BOS contract, a military family housing maintenance contract, or a supply type contract such as an expendable launch vehicle supply contract, which may also require construction and/or maintenance of government launch facilities.

6.1.2.4. If the contract is for completion of a specific construction project (“build the building”, “build the road”, etc.) regardless of the amount of time the project will take to complete (i.e. 3 months or 3 years); then a clause to update wage determination(s) and to allow for the adjustment of the contract price are not appropriate or required. However, a Davis-Bacon Act Price Adjustment Clause (either FAR 52.222-30, 52.222-31, or 52.222-32) as prescribed by FAR 22.407(e), (f) or (g) must be included in DBA-covered contracts that include provisions to extend the term (length) of the contract by option, extension or otherwise. Contracts that typically require one of these clauses include indefinite delivery indefinite quantity (IDIQ), Simplified Acquisition of Base Engineering Requirements (SABER), and service or supply contracts that require some construction work such as military family housing maintenance (MFH) and base operating services (BOS). See also FAR 22.404-12 for further detail. Additional Considerations and Recommendations:

6.1.2.4.1. FAR 52.222-30 “No Adjustment or Separately Specified”. Include in: (a) All cost-reimbursement contracts; (b) all fixed-price contracts with a separate pricing mechanism specified (such as a SABER contract using the R.S. Means pricing method); (c) some fixed-price contracts with no other pricing mechanism specified if total contract duration will be 3 years or less (especially if WD rates are not union rates and the WD survey date is less than five years old)*. Consideration should also be given to whether the contractor will be put at substantial economic risk by not allowing for an adjustment to contract price, if DBA wages increase dramatically, or to whether competition is sufficient to moderate out-year pricing escalation by the contractor (e.g. a sole source contract may permit windfall escalation in the out-years).

6.1.2.4.2 FAR 52.222-31 “Percentage Method”. Include in: Most fixed-price contracts of any duration, especially contracts involving multiple classifications, where the type of work or total hours are likely to vary significantly from year-to-year, or one or more applicable wage determination rates are union rates (which usually increase every year)*. Using this methodology requires the contracting officer to consider two equally important factors, as follows: (1) what portion of the total contact price should be adjusted? and (2) by what percentage should it be adjusted? The FAR 22.404-12 (c) default is that 50% be used as the estimated portion of the contract price that is labor (and thus subject to adjustment) unless the contracting officer determines, prior to the solicitation, that a different percentage is more appropriate for a particular contract. The contracting officer must also select a specific index by which the labor portion of the contract price will be adjusted. The index may be the U.S. Department of Labor Employment Cost Index, the Consumer Price Index or a similar index that the contracting officer determines is appropriate. The percentage may also be a fixed percentage that the contracting officer has determined is appropriate.

6.1.2.4.3 FAR 52.222.32 “Actual Increase Method”. Include in: Some fixed-price contracts of any duration involving few classifications, that will be relatively consistent in type of work and total labor hours each year, and wage determination rates for the classifications involved are not union rates (so are likely to change only about once in several years)*. This method may also be appropriate where a sole-source environment may make the “no adjustment” methodology unattractive (since that method may allow the contractor to excessively escalate in the out-years), or where the no adjustment methodology may place a contractor at severe financial risk in the out-years in a highly competitive environment (the contractor may not have escalated at all for the out-year in such circumstances). This method is nearly identical to the Service Contract Act Price Adjustment method required by FAR 52.222-43.

* See the “Davis-Bacon Act Desktop Guide” to learn how to detect wage determination “union dominance” and the survey date (if any or all rates are not union rates).

6.2. Are there any exemptions to DBA application? There are no exemptions provided in the statutory language of the DBA. The President may suspend application of the DBA in certain natural disaster situations, but this is rare. For example, DBA was suspended for a short time after hurricane Katrina.

6.3. How do I obtain a wage determination for my contract? In nearly all situations, the wage determination that you will need can be downloaded from www.wdol.gov.

6.3.1. Typically, your search for a wage determination will include the following considerations: (1) where the construction site work will be performed – what state and county (or comparable political subdivision). And (2) what type of construction work will be performed – “building”, “heavy”, “highway”, and/or “residential”. (FAR 22.404-2) (DOL AAM 130 and 131)

6.3.1.1. The “residential” wage determination is used for DBA-covered work performed on single family residences, apartments, duplexes, quadraplexes and similar structures that are used for long-term residential purposes, not short term lodging similar to “visiting quarters”. It also is normally not appropriate for any buildings (even those used for long-term residential purposes) that exceed four stories.

6.3.1.2. The “building” wage determination is used for DBA-covered work performed on all buildings that house people and/or equipment, except those projects for which the “residential” wage determination is appropriate.

6.3.1.3. The “highway” wage determination is used for highways, roads, streets, airport runways, and similar projects.

6.3.1.4. The “heavy” wage determination is used for most other construction that does not fall within the above-mentioned (building, residential, highway) construction types and therefore is considered a “catch all” wage determination for most other work. Work such as water and sewer lines, gas lines, exterior electrical or communication cabling installation, waste-water treatment plants, exterior playing fields or courts, exterior playgrounds, electrical substations, fencing, dams, bridges are some of the common “heavy” projects that would use this wage determination. Often there are multiple “heavy” wage determinations in a specific geographic area based upon the specific type of work being performed. Therefore, COs must be cautious that they have reviewed all the “heavy” wage determinations available in the area where the work will be performed and that they have selected the correct wage determination(s) for the specific project.

6.3.1.5. In the extremely rare event that one of the general schedule wage determinations is not appropriate for use on your construction project, a project wage determination must be requested from Department of Labor (DOL). A project wage determination is recommended only when one of the “general schedule” wage determinations is not appropriate for use or where the key work classification necessary for the work being performed is missing from the general schedule wage determination. An SF308 must be used to initiate such a request.

6.3.2. What if a work classification needed for the project is not included on the wage determination? The CO must require the contractor to request a “conformed” job classification and minimum rate of pay as outlined in the body of the wage determination and FAR 22.406-3. This conformance requirement is also contained in the contract clause FAR 52.222-6(b). The contractor will submit such a request on an SF1444. When reviewing such conformance requests, contracting officers should be aware that DOL will not approve a conformed rate for a skilled-trade job classification that proposes a rate of pay that is less than the lowest rate of the other skill-trade job classifications already listed in the wage determination. For example, if the “painter” classification has the lowest rate for a skilled-trade listed in the wage determination and provides for a minimum rate of pay of $12.00 per hour; then no request for a conformed wage rate of $11.99 or less for a skilled trade will be approved by DOL. DOL excludes laborers, truck drivers and heavy equipment operators from this “skilled-trade” conformance consideration.

6.3.3. Do I need to change or update the wage determination? Generally - No. However, if the contract is one where the term of the contract will be extended by option or otherwise, then the wage determination must be updated and made effective at the beginning of the option or renewal period of performance (FAR 22.404-12). Also, see the discussion in paragraph 6.1.2.4 above.

6.4. Does the Contracting Officer have any other DBA responsibilities? Yes.

Enforcement. Although DOL is generally responsible for enforcement of “wage and hour” laws that require the proper payment of minimum wages and fringe benefits, they do not have primary DBA enforcement responsibility. In accordance with FAR 22.406-1, 22.406-7, 22.406-8, and 29 CFR 5.6(a)(3) contracting personnel are required to make compliance checks on DBA covered contracts. Contracting agencies are responsible for the full and impartial enforcement of labor standards during the administration of construction contracts. DOL, however, does have regulatory and “oversight” responsibility and can take enforcement action at their discretion. (FAR 22.406-8 and 29 CFR 5.6(b))

6.4.1. What are a Contracting Officer’s DBA enforcement responsibilities? The CO must assure that the contractor and any of its subcontractors pay job site “laborers and mechanics” (hands-on construction employees) in accord with the DBA requirements (FAR 52.222-4, 52.222-6, and 52.222-10). This includes the following responsibilities;

6.4.1.l. Clearly and fully inform the contractor of the labor standards and wage requirements before construction begins. It is highly recommended that this be accomplished during preconstruction conferences.

6.4.1.2. Assure that the “laborers and mechanics” performing “hands on” work at the construction job site are paid no less than the minimum wage and fringe benefits specified for the work activity on the applicable wage determination in the contract, on a weekly basis.

6. 4.1.3. Assure that the contractor has posted the wage determination and government contracts posters in a location freely and easily accessible to construction employees.

6.4.1.4. Certified payrolls of the prime contractor and subcontractors must be provided to the Contracting Officer on a weekly basis (FAR 22.406-6) and reviewed on a timely basis.

6.4.1.5. Conduct labor checks and interviews (FAR 22.406-7) sufficient to ensure compliance and to verify the accuracy of the certified payrolls. For remote locations or other instances where the Contracting organization is geographically removed from the work site, this responsibility can be delegated to other Air Force personnel such as the engineering inspector. Contractors are less likely to violate DBA requirements when there is an enforcement presence at the job site.

6.4.1.6. Unless your squadron or command has issued directives, there is no specific frequency as to how often labor checks should be conducted. It depends on the individual circumstances. Circumstances such as having new contractors, past labor compliance issues, employee complaints, etc. will require increased compliance checks and job site interviews. However, it is recommended that as a minimum, a labor check be accomplished prior to final payment and as soon as practical after commencement of work.

6.4.1.7. Conduct full investigations of DBA labor standards violations when substantial violations and/or credible complaints are present. It is highly recommended that the Regional Air Force Labor Advisor’s Office be consulted before undertaking such actions. The Labor Advisors likely will attempt to obtain DOL assistance in conducting full investigations under DBA in lieu of the CO conducting the investigation.

6.4.1.8. Monitor SF-1413 forms (FAR 52.222-11) to ascertain what subcontractors are involved in the project.

6.4.2 How does a Contracting Officer resolve any violations? First the prime contractor should be approached to resolve any non-compliance issues discovered. This includes possible DBA violations by subcontractors. If an issue is not resolved voluntarily by the contractor and/or its subcontractors, withholding of contract funds may be appropriate. (FAR 52.222-7)

6.4.2.1. If resolution by the contractor and/or subcontractors is not obtained, the issue must be submitted to DOL. Normally, DOL will attempt to settle the issue through negotiation prior to conducting a formal hearing on unresolved issues. Debarment and/or contract termination may be appropriate in severe cases. (FAR 22.406-10 and 22.406-11)

6.4.3 What happens if DOL discovers a DBA violation first? DOL has enforcement authority. The agency is required to cooperate with DOL in all aspects of an investigation (FAR 22.406-12) including providing access to contract information and payrolls. Since compliance is the contractor’s responsibility, on a fixed price contract, any DOL action requiring back wages would normally be strictly the contractor’s liability.

6.5 Where can I get help? If you believe you need help with DBA applicability, regulatory interpretation, wage determination(s), or resolving compliance problems, contact your Regional Air Force Labor Advisor. A more detailed discussion of some DBA topics can also be found in the Labor Advisor’s Desktop Guides.